H-P edges up after analyst meeting

Fiorina 'comfortable' with Wall Street's forecasts

SAN FRANCISCO (CBS.MW) -- Hewlett-Packard shares edged up slightly Tuesday after CEO Carly Fiorina closed the company's analyst meeting and said she agreed with Wall Street's second-half outlook for the computing giant.

H-P
HPQ, -1.74%
shares rose 2 cents to close at $20.07 after the conclusion of the company's half-day analyst meeting in New York.

Neither Fiorina nor any other H-P official issued any kind of earnings or sales update for the company's current quarter. Prior to the meeting, analysts said they were not expecting much in the way of changes to H-P's financial outlook.

But Fiorina said she remained "comfortable" with the second-half forecasts of 62 cents a share profit and $36.6 billion in sales put forth by analysts surveyed by Thomson First Call. Fiorina said Palo Alto, Calif.-based H-P has a "pretty stable revenue picture" that gives the company "the ability to predict sustainable improvement" in spite of market conditions that show a weak upturn in technology spending.

Fiorina also reiterated that H-P has a goal of posting operating margins of 8 percent to 10 percent, and that H-P would take steps in 2004 toward reaching those targets.

"The levers we can control are (those of) our own performance," Fiorina said.

As signs of the company's performance, Fiorina and other H-P officials highlighted the company's continued position as the No.1 maker of imaging and printing products, and the recent IDC and Gartner survey results that placed H-P in the top spot for worldwide server sales.

Fiorina said that as part of H-P's effort to grow, the company would make more forays into the consumer digital entertainment market through greater linking of its various technologies.

"We're going to use our assets to take us out of the office and into the living room," Fiorina said. "We want to take advantage of the capabilities we already have.

In a separate presentation, Chief Financial Officer Bob Wayman said H-P would end up spending around $1 billion on restructuring in its fiscal third quarter, and would cut that figure to about $430 million by its fourth quarter.

Wayman added that H-P intends to spend about $2 billion this year on general business operational expenses, and research and development.

Additionally, Wayman said H-P plans to deposit $275 million in its employee pension fund in its third quarter, and raise that amount to $300 million for its fourth quarter.

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